JOHANNESBURG (miningweekly.com) – ASX-listed Sheffield Resources has signed a maiden binding offtake agreement with the largest mineral sands processor in China, Hainan Wensheng High-Tech Materials Company, for the future sale of zircon concentrate from its Thunderbird mineral sands project, in Western Australia.

The agreement is based on a minimum supply of 27 000 t/y of zircon concentrate, or around 54% of the estimated total volume of zircon concentrate to be produced from Stage 1 of Thunderbird.

The deal will be valid for an initial five-year period, with yearly contract extensions thereafter and the opportunity to supply volumes of above 50 000 t/y.

“The signing of a cornerstone Chinese customer represents another significant step towards the development of Thunderbird, one of the largest and highest-grade discoveries of mineral sands in recent decades,” the company said in a statement.

Initial earthworks and site access arrangements are currently under way at the project, ahead of targeted start of construction in the second quarter of 2018.

“We are delighted by the new and important relationship we have established between Sheffield and Wensheng [as it] has a depth of experience and [a] comprehensive sales network, representing a quality brand within the mineral sands industry.

“We continue to see strong demand for the range of high-quality zircon and ilmenite products that will be produced at Thunderbird. As we pursue our offtake strategy, we expect this demand to translate into additional agreements in coming months, continuing the success we have experienced in 2017,” Sheffield MD Bruce McFadzean said.

“With 44% of premium zircon for Stage 1 of Thunderbird already under binding offtake agreement, the addition of over half our Stage 1 zircon concentrate to our portfolio of binding agreements further supports the product quality of the project,” he added.